High 5G spectrum prices put pressure on telcos

Apex telecom business physique COAI has asserted that spectrum pricing must be saved conducive to market circumstances as 5G entails upfront capital investments with monetisation unfold over a long-haul, and pricing radiowaves excessive will solely push the gamers up towards the wall.


Photograph: Fabian Bimmer/Reuters

The stage is about for Telecom Regulatory Authority of India (TRAI) to come back out with its suggestions on 5G spectrum pricing and different modalities for upcoming auctions, and the announcement from the sector watchdog is anticipated anytime now.

Norms may even be labored out for brand spanking new frequencies comparable to 526-698 MHz and millimetre band, that’s 24.25 – 28.5 GHz, along with bands comparable to 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz.


The public sale will be performed inside 2-2.5 months of regulator popping out with spectrum suggestions, which might put the mega-event within the ballpark of June timeframe, a telecom division supply stated.

The business has been aggressively pitching for a drastic 80-90 per cent lower in costs of spectrum for next-generation providers, which is able to usher in extremely high-speeds and spawn new-age providers and enterprise fashions.

Advocating decrease costs for spectrum, COAI Director General, SP Kochhar advised PTI: “5G does not have any use cases which can be monetised in a quarter, so it is going to be a long-haul. At the same time, the capital investments have to be made in a particular period of time.”

It is pertinent to say right here that final time round, TRAI had instructed Rs 492 crore per MHz for spectrum in prime 5G band of 3300-3600 MHz, which meant {that a} cellular operator going for 100 MHz wanted to shell out a whopping Rs 49,200 crore for all-India spectrum.

However, frequencies on this band weren’t put up for public sale within the earlier spherical, because the frequency vary couldn’t be vacated in time and the bottom value of the radiowaves within the spectrum band was seen to be very costly for 5G providers.

In March 2021, the federal government went forward with public sale of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands.

A complete of two,308.80 MHz spectrum value Rs 4 lakh crore at reserve value in several bands had been placed on the block, of which 855.60 MHz quantum was offered within the public sale, leading to whole successful bids value Rs 77,820.81 crore.

No bids had been acquired in 700 MHz and 2500 MHz bands.

Kochhar stated that pegging the costs excessive this time round would push the telcos in a tough state of affairs, to say the least.

“If telcos have to pay high price for spectrum, their back will be to the wall…,” Kochhar stated.

Cellular Operators’ Association of India (COAI’s) members embrace Reliance Jio, Bharti Airtel and Vodafone Idea.

According to Kochhar, the advantages that will accrue to industries across-the-board with introduction of 5G, would far outweigh the realisations from spectrum auctions, per se.

And whereas 5G will see shopper and enterprise functions, the uptake on shopper aspect can be a complete lot quicker.

“Government should not miss the woods for the timber and due to this fact they have to see it (public sale, pricing) in its entirety, within the long-term.

“They must go for spectrum pricing that is conducive to the market conditions…as per our discussions with our members, it should be reduced by 80-90 per cent on all bands,” Kochhar stated.

Telecom regulator, TRAI, in November-end final 12 months, had launched an in depth session paper to debate threadbare the modalities for public sale of spectrum throughout a number of bands, together with pricing, quantum and different circumstances — making ready the groundwork for upcoming 5G auctions.

The spectrum auctions are slated to be performed in 2022, to facilitate the rollout of 5G cellular providers inside 2022-23, by personal telecom suppliers.

TRAI’s suggestions will contact on essential points like valuation and reserve value of spectrum, together with 5G, quantum of spectrum, block measurement, eligibility circumstances for participation in public sale, rollout obligations, spectrum cap, and give up of spectrum.

Telecom service suppliers are conducting 5G trials in Delhi, Mumbai, Jamnagar, Ahmedabad, Kolkata, Chennai, Hyderabad, Bengaluru, Lucknow, Gurgugram, Gandhinagar, Chandigarh, Pune and Varanasi together with city, semi-urban and rural areas.

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